Some treaty standards for the protection of investments, like national treatment and MFN, are variable. They depend upon standards granted to the host State's nationals or to investors from third States. By contrast, standards like fair and equitable treatment and full protection and security provide fixed reference points. The question arises whether these reference points are the same for all states regardless of their level of development and their economic, social and political circumstances at the time of the investment.
Some arbitral tribunals have been prepared to consider the social, economic and political situation prevailing in the host country when assessing the threshold for the violation of investment protection standards or the level of compensation required by BITs. This article addresses the question whether and how tribunals have made use of the flexibility in the legal standards in investment law to take account of the different economic and political conditions across nations. It concludes by considering what the implications of this flexibility might be and how far it should go.